January Jobs are a mixed bag while CPI brightens

The January Jobs report released by the US Labor Department on Wednesday showed 130,000 non farm jobs that surprised many economists expecting a much lower rate, and while some saw it as an affirmation of the resilience of the American economy, others looking at the annual revisions found it as a mere blip in a troubling pattern for the world’s largest economy; and, central to that concern was the high rate of inflation, 2.7 percent, above the desired rate of 2 percent mandated by the Federal Reserve,

“U.S. jobs data released this morning showed signs of a rebounding labor market in January, with unemployment ticking down and a total 130,000 jobs added in January, driven mostly by hiring in the service sector,” wrote Chris Bangert-Drowns, researcher at the Washington Center for Equitable Growth, a left-leaning research nonprofit,” according to The Hill.

Taking an opposite track is Stephen Stanley, chief U.S. economist at Santander U.S. Capital Markets who said, "I am skeptical that the degree of vigor seen in these data will be consistently repeated going forward, but this release should slam the door shut on the narrative that the labor market is on the cusp of falling apart.”

Investopedia quoted Dante DeAntonio, Senior Director at Moody’s Analytics, who reiterated prior evaluations saying, "The January employment report was a mixed bag. It doubled down on the fact that the economy struggled to add jobs in 2025, while also offering a slightly more optimistic view of job growth to start 2026. ...The stronger-than-expected job growth in January does little to change our view of the labor market moving forward.

As in previous months, in 2025, health care was strong at 82,000 and social services also led at 42,000, the latter an umbrella label for social support from local and state governments as well as social workers. As has been widely reported, and as we have also noted, the aging of America’s baby boomers has increased the need for these services.

One consideration is that the lack of growth in other industries can easily keep the economy in stasis, and the weakness in other jobs is a cause for worry by some economists; and, bankers, even from the White House, who in advance of the release of the report seemed anxious; especially since President Trump has only a 40 percent approval rate with most of the negatives centering on his handling of the economy.

An important note: “The revisions also underscore how dependent the job market has become on hiring in the health care sector. Before the revisions, health care accounted for about 405,000 of the 584,000 jobs added in 2025, or nearly 70 percent of the gains. According to the latest data, health care companies added 391,000 jobs, while employment in other sectors fell by a combined 210,000 jobs.”

The New York Times reported that previous revisions were, “small and attracted relatively little attention, But the 2024 adjustment was the biggest in years, reducing estimated job growth by nearly 600,000. This year’s revisions was even bigger, the largest since 2008 in percentage terms.”

There is another cautionary note: “But the largest increase in payrolls in 13 months . . . likely exaggerates the labor market's health, as revisions showed the economy added only 181,000 jobs in 2025 instead of the previously estimated 584,000. That is a fraction of the 1.459 million jobs added in 2024, the final full year of former President Joe Biden's term,“ said Reuters.

Even more importantly we can also see that with those revisions the US is not keeping up with expected growth, and population size for the last two years and causing future uncertainty.

Trying to make sense of this mixed bag of reports and opinions is not creating easy predictions for the future, but when the Federal Reserve meets in March it is widely expected that interests will remain unchanged, and if true will not please the president.

On Friday the Labor Department released the Consumer Price Index, giving a  mild boost to the economy showing a slow down in inflation to 2,4 percent and, “The slowdown in overall inflation was cheered by the White House, with a spokesperson posting on social media that "America's economy is set to turbocharge even further through long-overdue interest rate cuts from the Fed." Americans anxious about the labor market and affordability have soured on President Donald Trump's handling of the economy,” reported Reuters.

“But just because the job market is strong doesn’t mean that there isn’t more room to cut interest rates," Fed Governor Stephen Miran told Fox Business after Wednesday's jobs numbers were released.

Bets are on that the Federal Reserve are unlikely to cut interest rates with this stranger than expected job report, and the markets did rise with the better than expected news, making Miran a possible outlier, again, when the Federal Opens Market Committee meets in March, as inflation  inches closer to the 2 percent target.

"Overall, the data suggest that price pressures remain a little too hot for comfort for the time being, but the direction of travel for inflation continues to look to be lower, even if this has proved a bumpy and slow process," said James McCann, senior economist, investment strategy at Edward Jones. "For the Fed, this probably doesn't change much in the near term."

“Miran has pushed for larger interest rate cuts since President Donald Trump appointed him to fill a vacancy at the Fed last year. He said on Wednesday before the CPI report that fewer regulatory burdens on the U.S. economy would help it produce more, which would lower prices and give the Fed the opportunity to further cut rates,” according to Investopdia.

Which brings us to prices, a constant worry for all but the wealthiest consumers who as we saw last month are largely supporting the US economy, while middle and lower consumers are feeling the pinch and holding back.

Federal Reserve Bank of San Francisco President Mary Daly in a blog post wrote “highlighted that working households don't feel optimistic these days, cautiously or otherwise, [R]ecent surveys of consumer sentiment show that people expect unemployment to rise and jobs to become more scarce over the next six months. And open positions are already pretty hard to come by, having fallen to their lowest since the pandemic in December.

Further expanding, she added, "We’ve been in a relatively low-hiring, low-firing environment for some time," Daly wrote. "That may persist, but workers are aware that things could change quickly, leaving them in a no-hiring, more-firing labor market. With inflation printing above the FOMC’s 2% goal, this rightly feels precarious."

The CPI did give some good news according to Reuters: “Eggs and coffee were also relatively cheaper last month as were fresh fruits and vegetables. The Trump administration has rolled back and cut tariffs on some imported foods. Still, food prices increased 2.9% from a year ago.

Consumers also got more relief at the pump, with gasoline prices dropping 3.2% in January from December. Though electricity prices dipped 0.1%, they surged 6.3% year-on-year, reflecting demand from data centers to power artificial intelligence.”

Affordability. The buzz word of the momentum shows more clouds, “The cost of shelter, which includes rents as well as motel and hotel rooms, increased 0.2% after surging 0.4% in December. Food prices rose 0.2% after accelerating 0.7% in the prior month. Grocery store prices climbed 0.2% as more expensive cereal and baked goods were partially offset by a 0.4% easing in the cost of beef and veal.”

Hovering in the background before the March FOMC meeting is the Personal Consumer Expenditure Price Indexes (CPE) which track consumer behavior, for example seeking cheaper alternatives be they generics, in the case of groceries, or more meals prepared at home versus dining out; and, is a key indicator for any moves from the Federal Reserve.

Fed keeps interest rates the same frustrating Trump

Wednesday the Federal Open Markets Committee of the Federal Reserve Board, as expected, voted to keep interest rates the same from 3.5 percent to 3,75 percent citing the resilience of the United States job market among other key components, with Chair Jerome Powell saying, the economy “expanded at a solid pace last year and is coming into 2026 on a firm footing."

All of which follows a steady pattern,well established during his tenure, using established criteria of looking at the data on inflation and unemployment to meet the twinned mandate of the Federal Reserve, inflation at 2 percent, and full employment. But, despite  this traditional approach, President Trump has been not just unhappy with it, but has made disparaging remarks about Powell and his intelligence, and wants to see greater rate cuts; and, in the recent past has called for cuts as deep as 3 percent, a figure that many economists believe could lead to inflation, and possibly a recession.

The traditional independence of the Fed has been in the public eye especially since Trump’s second term, and in response to questions asked at the press conference, after the meeting, about the implications of politics in FOMC decisions, the Chair replied, “It’s just an institutional arrangement that has served the people well,” he said, “and If politics get in the way, it would create the perception that the bank would act in the interest of one group or another, rather than the broader public,” adding that, “If you lose that, first of all it would be hard to restore the credibility of the institution.”

There were two dissenters, supporting the president in wanting at least a quarter point cut, and they were Trump’s handpicked board members, Stephen Miran and Christopher Waller.

While inflation has cooled to 2.7 percent, it is still a matter of concern for the Fed but Powell said to the media, and reported by The New York Times,"We still have some tension between employment and inflation,” and noted, “but it has waned a bit. That means there’s less risk of an acceleration in inflation and also of a serious deterioration in the labor market.”

Core inflation as measured by the PCE, the Fed’s “preferred inflation measure — is just above 2 percent, stripping out tariff effects,” they added; but, “Powell said he takes a lot of solace from indications that consumers think inflation won’t be too hot either over the short or the longer term. “Expectations have been solid, and they reflect confidence in the return to 2 percent inflation,” and in an opined they reported, “If consumers start to think that prices will rise, it’s more likely they will, because workers will demand higher wage increases to compensate.”

The December 2025 Index increased on a seasonal basis to 0.3 percent, and over the last 12 months increased 2,78 percent, again seasonally adjusted, with the largest increase to 0.4 percent was for shelter and “was the largest factor in all the time's monthly increase,” in the Bureau of Labor Statistics report released last month.

Taken together there is cause for vigilance by the Fed, and of course the White House.

With eyes set on future developments Powell said, “We don’t take things off the table but it isn’t anybody’s base case right now,” in response to questions of a rate hike.

It’s been widely reported that Trump is focused on Powell’s replacement after his term empires this May, and he said on Thursday at a Cabinet meeting, "Next week ... we're going to be announcing the head of the Fed, who that will be, and it'll be a person that will, I think, do a good job."

On Friday he did just that, selecting former Federal Reserve Governor Kevin Warsh to be the next chair, and as reported by Investopedia, “Warsh, who served as a Fed governor between 2006 and 2011, beat out several finalists for the job, including Trump economic advisor Kevin Hassett and BlackRock executive Rick Rieder. Warsh will take over as Fed chair after Jerome Powell's term expires in May, assuming he is confirmed by the Senate.

"I have known Kevin for a long period of time, and have no doubt that he will go down as one of the GREAT Fed Chairmen, maybe the best," Trump wrote in a social media post Friday morning.”

Warsh, a former Morgan Stanley banker, “had long been considered one of the front-runners for the president’s nomination. And, during his tenure he became “the youngest governor in the bank’s history, and served as its liaison to Wall Street during the 2007-08 financial crisis,” according to The Hill.

Warsh needs Senate confirmation, and this is not a slam dunk, and “Republican Sens. Thom Tillis (N.C.) and Lisa Murkowski (Alaska) have vowed to oppose anyone the president nominates to the role while the Justice Department is conducting a criminal probe into the bank and Powell,

Tillis could also use his perch on the Senate Banking Committee to hinder Trump’s Fed nominees from being approved by the panel, which is a key procedural step on the way to a full Senate confirmation vote,” they added in their reportage.

In what is now apparently a full blown political tempest, “Tillis and Murkowski’s support could be critical for Warsh with Senate Democrats unlikely to give him much, if any, support. Democrats are also fuming over Trump’s attempt to fire Fed board member Lisa Cook, whose challenge to the president’s order was heard last week by the Supreme Court.”

He has “accused the Fed under Powell of using independence as a shield from accountability, and said members of the bank should “grow up” and “be tough” in the face of criticism.”

There is more than affinity for interest rate cuts and a record of critiquing the Fed under Powell, there is this: “The nominee also shares close political connections to Trump. His father-in-law, cosmetics heir Ronald Lauder, has donated millions of dollars to Trump and Republican candidates, and was reportedly behind the president’s quest to purchase Greenland.”

Some economists according to  USA Today said that Warsh may not be as docile as expected, leading us to think that in the foreseeable future, could Warsh turn out to be like Powell?

December Jobs Report: mild with clouds ahead

The times they are a changing said an old song, but Friday's job report from the US Dept. of Labor said otherwise with a barely changed jobs outlook for the American economy from December with 50,000 non farm jobs created scarcely changed from the prior month; and, with a modest expectation of 53,000 jobs, stasis has set in, even though uncertainty still reigns, and with the accompanied 4,4 percent unemployment rate the US is showing resilience in the face of extreme cautiousness by employers making only the most modest and necessary hiring.

Continuing along this path are the heavy hitters of health care catering to the aging population of baby boomers joined by high income earners, as we saw last month, still bankrolling restaurants and bars, despite lower alcohol consumption. But, the good times are only a deception since there have been less than 50,000 jobs created since January 2025, and this alone has become a cause of concern for economists as they watch employment to population growth, and see a deficit.

“At this point, we have to be concerned about the strength of the labor market. Total job creation at less than 0.5% is extremely rare in recent history outside of recessions or the jobless recovery of the early 2000’s. This far into an economic expansion, it’s essentially unheard of,” wrote Michael Linden, senior policy fellow at the Washington Center for Equitable Growth, a left-leaning non-profit,” reported The Hill.

Perhaps ominously, he added, ““Combined with the persistent concerns over cost-of-living, a weak labor market could tip the economy into a contraction.”

That brings us to the entanglement of politics and the economy, and one which President Trump said he would fix on the campaign trail and that in the near year since he was sworn into office has not materialized with inflation still hovering at 2.6 percent and persistently high costs of housing and groceries.

Of course, no president controls the economy like the Wizard of Oz as we've stated before, but sitting in the Oval office they have to take it on the chin when costs are elevated, and the polls are showing that Trump is getting negatives in the 30s, while critics have pointed out that he seems more intent on foreign affairs, under the banner of economic gains, but how that will materialize on Main Street, as well as Wall Street is an open question,

There are hopes for lower and abundant gas to fuel America’s love affair with motor vehicles but investors and economists have said that sourcing Venezuelan oil with the removal of President Nicolas Maduro may be more hope than reality with a moribund infrastructure, safety concerns, among many others.

Affordability is the new buzzword when discussing the economy in the US and the high cost of housing, both rental and mortgages, has escalated fears in all but the most well heeled consumer; and, even administration officials are worried about the foreign focus especially with the departure of Trump stalwart Marjorie Taylor Green, and her dire warning of the prospect of the Republicans losing the Congressional dominance in the upcoming midterms over the high cost of living for American working families,

There are some who feel more positive and The New York Times wrote that “Most analysts expect that this momentum moderated in the last three months of 2025. But they still expect growth in the $30 trillion U.S. economy will register a respectable pace in 2026 — above 2 percent — even as serious concerns about housing affordability and the general cost of living persist.”

We are looking at “a series of barometers for Mr. Trump’s second term, during which the president has pursued an agenda of wide-scale deregulation, generous corporate tax cuts, punishing global tariffs, tougher border enforcement and a full-scale restructuring of the federal bureaucracy. That effort alone resulted in the loss of roughly 277,000 jobs from the ranks of government last year.”

Are all of these pieces, as the Times noted, able to cobble together the economy? The absence of an end game has caused worry and concentration in many corners,

Reflecting that worry makes for some searching looks and a less than optimistic, if not pessimistic outlook and “Those policy decisions — immigration, tariff, trade — are probably central to the slowdown that we’ve seen, particularly if you’re comparing it to the last two years or so,” said Olu Sonola, the head of U.S. economic research for Fitch Ratings,” he told the Times.

“It’s not going to be a boom by any means. It’s not going to be a bust by any means,” he said.

Contrast this with what, “In a series of posts on social media, the Council of Economic Advisers said that the jobs figures from December underscored a “a stable labor market where workers’ purchasing power has been improving due to pay increases outpacing inflation.”

“Kevin A. Hassett, the director of the White House National Economic Council, later told CNBC that the hiring numbers “look a little bit different than every other indicator that we have.”

It’s our belief that the White House is looking nervously over their shoulders as they try to manage a full plate, and predictions from those previously cited are reflecting uncertainty wrapped in hope. And, adding to it, Hassett said there is "A heck of a lot of economic growth, and it doesn’t necessarily have to mean a whole huge amount of job creation.”

Of equal concern is “The unemployment rate for young people, between the ages of 16 and 24, appears to have mellowed out after steadily rising from a 2023 low. It’s now at 10.4 percent, down slightly from November. Economists have been particularly concerned about this group, entering the labor market at a time when hiring has been extremely sluggish even though few people are getting laid off.”

When colleges hand out diplomas in May and June, the time for graduates to gain full employment will be further watched closely; and, even last year’s graduates are pessimistic about getting full time employment, seeking marriage, starting a family and buying that first home, with many interviewed stating that home ownership may be merely a dream.

The unemployment rate for Black workers has dropped  by seven tenths of a point, to 7.5 percent, reversing November gains. Even with gains and losses that the data tracks, it’s clear that  the rate of unemployment at the end of 2024, was 6.1 percent at the end of 2024. And as reported by the Times “Black workers are still roughly twice as likely to be unemployed as white workers.”

Fortune Magazine had noted that “Official unemployment numbers also disguise the depth of the crisis. Black women’s unemployment rate rose from 5.4% in February to 7.5% in September—already more than two points above what the Federal Reserve considers “full employment.” But when accounting for the hundreds of thousands of women pushed out of the labor force entirely since 2020, the real unemployment rate for Black women is 10.23%.”

Concentrated in lower wage jobs such as food service health care, think nursing assistants in care facilities, and retail, Black women’s employment is gaining in these areas but with much lower wages than other roles, “Even within health care, Black women face some of the largest racial and gender pay gaps. Meanwhile, Black women lost 1,500 jobs in government, a more stable and higher-paying sector, and saw zero gains in finance, transportation, or professional services. In short, they are gaining jobs where wages are lowest and losing them where wages are better,” Fortune added.

“Overall, the details of this survey are very encouraging,” wrote Thomas Simons, an economist with Jefferies, in a note to clients. “The slack in the labor market that emerged during the spring and summer looks more and more like a temporary response to the tariff announcements than a fundamental shift in the labor market.:

The Federal Reserve Bank is again in a tight spot, with many saying a pause in future rate cuts,even as far out as April seem unlikely as the focus in reducing inflation will be their goal despite the tepid report from December, a move bound to anger the present who wants deep cuts to at least three percent, and while Chair Jerome Powell, whose term ends in May, has said he will stay; but, on Sunday it was also reported by the Times that, “The U.S. attorney’s office in the District of Columbia has opened a criminal investigation into Jerome H. Powell, the Federal Reserve chair, over the central bank’s renovation of its Washington headquarters and whether Mr. Powell lied to Congress about the scope of the project, according to officials briefed on the situation.

The inquiry, which includes an analysis of Mr. Powell’s public statements and an examination of spending records, was approved in November by Jeanine Pirro, a longtime ally of President Trump who was appointed to run the office last year, the officials said.”

In a video taped rebuttal Powell said. “The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president,” and added “This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions — or whether instead monetary policy will be directed by political pressure or intimidation.”

November Jobs Report is shaken, but not stirred

Continuing the slowdown for the American job market the Labor Department released November employment figures on Tuesday consistent with what we have seen for the last several months: the US took a loss of 106,000 jobs, and a gain of only 64,000 jobs with an unemployment figure of 4.6 percent the largest seen in four years; but, due to the government shutdown it does not contain the usual snapshot, and some economists see the figures as shaky with the lack of not only the snapshot, but also the data collection from the household survey, methods lacking the necessary detail due to shutdown delays.

Methodology is at the forefront of blow-back from the White House touting the success of the American economy and the increased proliferation of native born workers, an assertion consistent with the Trump administration's goals of immigrant removal both legal, and illegal.

CNN reported that “The White House on Tuesday touted the latest employment figures as a sign of a “strong, American First economy,” highlighting gains in the private sector:

“Since President (Donald) Trump took office, 100% of the job growth has come in the private sector and among native-born Americans — exactly where it should be,” White House press secretary Karoline Leavitt wrote Tuesday.” 

“Private-sector businesses have indeed driven job growth this year while public sector employment has declined – entirely because of steep federal workforce cuts by the Trump administration. From January through November, the US economy added 499,000 jobs: The private sector added 687,000 jobs and the government (federal, state and local) shed 188,000 jobs.”

With the midterm elections upcoming in a matter of months the administration is determined to show that there are job gains for the US, but as CNN added, “However, the pace of job growth has fallen off: The year-to-date employment gains – overall and private-sector – are the weakest since 2020 and, before that, the Great Recession.

Additionally, it’s impossible to attribute the monthly employment gains reported widely from the jobs report to any particular nativity or documentation status – labor force and demographic statistics are drawn from an entirely different survey than the monthly payroll numbers."

While some economists and observers see this as a shell game by the White House, it’s a sure bet with high stakes at maintaining a lead in the US House of Representatives they will want to put a best foot forward on what is a slowly leaking jobs market.

While the DOGE decimation of federal payrolls gave a strong hit to the report, combined with more workers holding part-time jobs because they could not find full-time work increased to 8.7%, its highest since August 2021, a concerning fact.

According to CNBC, “The October slump came from a steep fall in government employment as deferred layoffs instituted earlier this year took effect. Government payrolls were off 162,000 for the month, and fell an additional 6,000 in November."

Once again, the heavy hitters were health care, adding 46,000 jobs, with more than 70% of the total net increase, and construction added 28,000, while the umbrella label of social assistance showed 18,000.

It was also reported, “On the down side, transportation and warehousing was off 18,000, part of a continuing trend in job losses for the sector. Leisure and hospitality also posted a loss of 12,000.”

A significant reason for the steady and reliable hiring increases in health care are America’s aging population, and their reliable needs.

While hiring has slowed and in some cases been eliminated, the Trump White House paints a glowing picture: “The strong jobs report shows how President Trump is fixing the damage caused by Joe Biden and creating a strong, America First economy in record time,” Leavitt said in a statement adding that “Workers’ wages are rising, prices are falling, trillions of dollars in investments are pouring into our country, and the American economy is primed to boom in 2026.”

The Federal Reserve in creating a rate cut had a difficult path to follow and

the dilemma that Powell has faced, as we have noted many times before, is the balancing act between meeting the mandate of full employment with 2 percent inflation.

Inflation has rebounded from earlier years when it was over 3 percent, especially in the post pandemic world, the current rate is still high; and, is especially felt by low income Americans during their weekly grocery shopping;with many feeling that the president has not kept his campaign promise of lowering those prices, inasmuch as any president can.

“The Fed is unlikely to put much weight on today’s report given data disruptions,” said Kay Haigh, global co-head of fixed income and liquidity solutions at Goldman Sachs Asset Management. To CNBC, noting that,“The report on December’s employment data, released in early January ahead of the next meeting, will likely be a much more meaningful indicator for the Fed when it comes to deciding the near-term policy trajectory.”

Thursday offered a glimmer of hope with the CPI report that strips out volatile food and energy costs, and according to Yahoo Finance,“Inflation pressures eased more than expected in November, according to the latest data on consumer prices published by the Bureau of Labor Statistics.”

The Consumer Price Index (CPI) rose 2.7% over the prior year in November, less than the 3.1% increase that had been expected by economists, according to Bloomberg estimates.”

However, there is a cautionary note, “This looks like positive news overall, but the lack of detail and the absence of data collection during the shutdown introduce a degree of skepticism that’s hard to ignore," wrote Olu Sonola, head of US economic research at Fitch Ratings, in an email after the report,” but added that “Tariff pass through remains muted, even as companies stocked up on holiday imports facing higher duties. The Fed will welcome that trend, given its recent focus on cutting rates to support a softer labor market."

In his Wednesday night address to the nation, the president said, “Very importantly, there are more people working today than at any time in American history. And 100 percent of all jobs created since I took office have been in the private sector. Think of that, 100 percent of all jobs have been in the private sector rather than government, which is the only way to make a country powerful and great."

As was expected he trashed former President Biden and his handling of the economy, immigration and that the rest of the world laughed at us, and while we will leave the majority of fact checking to others, to say that Trump was on a stretch would not be an exaggeration.

“Already, I’ve secured a record-breaking $18 trillion of investment into the United States, which means jobs, wage increases, growth, factory openings and far greater national security. Much of this success has been accomplished by tariffs, my favorite word, tariffs, which for many decades have been used successfully by other countries against us, but not anymore.”

Tariffs have been the core of uncertainty by the nation’s employers and while the full effect may not be seen until January, this current fear can be seen in the November jobs report.

Taking a closer look,”Average hourly earnings rose just 0.1% for the month, below the estimate for 0.3%, and were up 3.5% from a year ago, the smallest annual gain since May 2021,” and "The 0.1 percentage point increase in the unemployment rate was largely a function of labor force growth.”

“The strong jobs report shows how President Trump is fixing the damage caused by Joe Biden and creating a strong, America First economy in record time,” Leavitt said in a statement, stating that, “Workers’ wages are rising, prices are falling, trillions of dollars in investments are pouring into our country, and the American economy is primed to boom in 2026.”

Steady consumer spending has been seen by high income earners, and while inflation has rebounded from earlier years when it was over 3 percent, especially in a post pandemic world, the current rate is still high, and is especially felt by low income Americans during their weekly grocery shopping; and, many are feeling that the president has not kept his campaign promise of lowering those prices, inasmuch as any president can.

A recent PBS/NPR/Marist poll showed Trump taking a direct hit by Americans who feel that he has failed them, with 55 percent of those polled disapproving of the way he is handling the economy.